How to Spot a Rug Pull Before It Happens
How do you spot a rug pull before it happens? Check four things before you buy: whether the liquidity is locked or burned, how much of the supply sits in a few wallets, what the contract owner can still change, and what the deployer has launched before. A token that fails several of these checks gives its creators an easy exit. What is a rug pull and how does it work? A rug pull is when the people behind a token take the value out of it and leave buyers holding coins that can no longer be sold at a fair price. It usually happens soon after launch, while attention and buying pressure are at their highest. Most rug pulls follow one of three patterns: Liquidity removal: the creator adds the token and a base asset such as BNB or ETH to a DEX pool, waits for buyers, then withdraws the pool. With the base asset gone, the token has almost nothing to trade against. Dumping a large supply: one or a few wallets hold most of the tokens and sell them into the pool at once, which drains the base ...